Fraud Regulations and Reporting

Welcome to our Orthopedics Practice Workers’ Compensation Guide! This resource aims to offer a concise overview of workers’ compensation concerning orthopedic injuries. It’s important to understand that this guide is not a substitute for professional advice.

For more detailed and personalized information, we recommend visiting the official workers’ compensation portal. This portal is your go-to source for the latest regulations, forms, and additional resources, ensuring you have access to the most current and accurate information.

Your well-being is our primary concern, and we hope this guide serves as a helpful starting point for your comprehension of workers’ compensation in the context of orthopedic care.


Fraud Regulations and Reporting

Overview of Workers’ Compensation Fraud: Workers’ Compensation Fraud transpires when an individual deliberately provides false information about a substantial fact with the intention of obtaining or denying workers’ compensation benefits or evading legal responsibilities. Fraudulent acts also encompass employers misrepresenting employee payroll or classification and the criminal act of failing to uphold mandatory Workers’ Compensation insurance coverage.

Worker’s Commitment of Fraud: A worker engages in fraud when:

  • Misrepresenting job status while receiving temporary disability benefits.
  • Filing a claim for an injury unrelated to or not occurring on the job.
  • Knowingly misrepresenting physical condition to secure Workers’ Compensation benefits.
  • Misrepresenting past trauma or treatment.

Employer’s Commitment of Fraud: An employer commits fraud by:

  • Providing false information about employee payroll or proper classification.
  • Neglecting to obtain required workers’ compensation insurance coverage. This violation, according to NJSA 34:15-79, can lead to up to 18 months in jail, a $10,000 fine, and substantial civil penalties.

Fraud by Attorney or Healthcare Provider: An attorney or healthcare provider engages in fraud when assisting in fraudulent schemes, participating in double billing, or intentionally billing for services not rendered or unwarranted.

Legal Framework for Workers’ Compensation Fraud: Workers’ Compensation fraud is regulated by the NJ Workers’ Compensation Statute, N.J.S.A. 34:15-57.4. The statute deems a criminal violation to occur when misrepresentation is made with the intent of wrongfully obtaining or withholding benefits or premiums related to Workers’ Compensation. If benefits are wrongfully obtained, a Judge of Compensation can exercise discretion to terminate benefits and order the forfeiture of improperly received benefits.

Role of the Office of Insurance Fraud Prosecutor (OIFP): Established in 1998, the Office of Insurance Fraud Prosecutor (OIFP) investigates allegations of Medicaid and insurance fraud. Its mission includes gathering case-specific facts and evidence, enabling the State of New Jersey to make informed decisions on how to proceed in cases involving insurance fraud. This is especially relevant in cases where individuals submit false or inflated claims to private or government insurance providers.


Employer Fraud in Workers’ Compensation (NJSA 34:15-57.4):

False Statements by Employers: An employer found guilty of making false or misleading statements, including employee misclassification or engaging in deceptive leasing practices, with the intent to evade full benefits or premiums, is charged with a fourth-degree crime.

Civil Liability for Evasion of Premiums or Denying Benefits: Individuals evading full premium payments or wrongly denying or delaying benefits are subject to paying the outstanding sum along with simple interest. Moreover, they are civilly liable for damages and all reasonable costs and attorney fees incurred by the injured party.

Failure to Purchase Required Workers’ Compensation Insurance (NJSA 34:15-120.1(c); NJSA 34:15-79):

Illegal Failure to Obtain Insurance: Failure by an employer to purchase mandated Workers’ Compensation insurance is a disorderly persons offense. If deemed willful, it escalates to a fourth-degree crime.

Criminal and Civil Penalties: Civil penalties for non-compliance include up to $5,000 for the initial ten days and an additional $5,000 for each subsequent ten-day period. An extra $1,000 penalty and a 15% assessment (up to $5,000) of the judgment amount are imposed upon uninsured employers if a Judge of Compensation enters a judgment against them. Criminal penalties, treated as a disorderly persons offense, become a fourth-degree crime if determined to be willful.

Worker Fraud in Workers’ Compensation (NJSA 34:15-57.4):

False Statements by Workers: Any individual intentionally making false statements to wrongfully obtain benefits commits a fourth-degree crime.

Repayment and Order by Division: If benefits are wrongly received, the individual is liable to repay the sum with simple interest. The Division of Workers’ Compensation may order immediate termination or denial of benefits for the claim and a forfeiture of all compensation or payments sought.

Health Care Claims Fraud:

Submitting False Health Care Claims: Submitting false claim forms to receive payment for health care services not provided is a violation of the NJ Health Care Claims Fraud Act. For licensed professionals, such violations result in 5 to 10 years of imprisonment and fines up to $150,000 or five times the claim amount. Non-professionals can face 3 to 5 years in jail.

Reporting Fraud:

Preserving System Integrity: The Division of Workers’ Compensation is dedicated to upholding the system’s integrity.

Reporting Fraudulent Activity: Suspected fraudulent activity by workers, employers, medical providers, or attorneys can be reported to the NJ Division of Workers’ Compensation Fraud Coordinator via mail, phone, fax, or email. Anonymous reporting is accepted.

Reporting Uninsured Employers: For reporting uninsured employers, an online Report of Non-Compliance form can be completed. Anonymous reporting is accepted, requiring details such as the employer’s name, address, and names of principal operators if possible.

Reporting Employer Misrepresentation: Suspected employer misrepresentation regarding payroll or employee classification can be reported to the New Jersey Compensation Rating & Inspection Bureau.

Other Referrals: For all other referrals, the Office of Insurance Fraud Prosecutor can be contacted at the NJ Department of Law & Public Safety, Division of Criminal Justice. The contact number is 1-877-55-FRAUD (1-877-553-7283).